Demand action on pensions - The looming crisis we all ignore

TRYING to instigate a discussion that might acknowledge our looming pensions’ crisis brings to mind those myriad sandwich-board men who warned us all with unshakeable certainty that “The End Is Nigh” — we all know he will be right eventually but we’re not that bothered about the grim prospect to do anything about it just yet. Make us good Lord, but not just yet.

Yesterday’s news that Waterford Crystal workers have, six years after they lost their jobs, received an offer of a modest pension settlement from Governmnet is a reminder, though people of a certain age do not need to be reminded of what lies ahead, of how very fraught the whole area is and how vulnerable private sector workers are on this socially divisive issue.

A modest pension funded over a lifetime of work by an individual and their employer that leads, or at least should lead, to a dignified old age is one of the buttresses of the social contract that has helped sustain European democracy for decades. However, that particular lifeboat was holed below the waterline by the wretched banks and their recklessness almost a decade ago. As hundreds of thousands of people have discovered the banks expect that all borrowings be repaid in full — and with interest — but that any funds entrusted to them to build a pension fund can be lost to the four winds without any consequences. It is as if pension investments were regarded as a each-way bet on the flapper at Tramore races rather than an individual’s provision for old age. That this issue is, for the moment at least, irelevant to public sector workers or pensioners shows how divided this society is and how deeply inequitable our current system is.

In the last seven years, since the banks collapsed, our pension savings have risen by 70%. However, that statistic flatters to deceive; the liabilities of pension funds have grown at an even greater rate. As Jerry Moriarty, chief executive of the Irish Association of Pension Funds (IAPF) has said: “people will either have to live on less, retire later, or increase their savings”. Persistently low interest rates over an extended period have exacerbated this problem.

The State has welched on its responsibilites on several fronts. Private pension funds were shamelessly plundered to the tune of €2bn — individual’s savings intended to provide for their old age. Regulatory supervision was far too feeble. The Government has also failed to address the sizeable annual deficit in the State pension bill, which is set to soar to unsustainable levels by mid-century unless a funding plan is adopted. On the contrary, pay talks with public sector unions are focussed on ending the pension levy, one that in no way matched the pensions to be provided, thereby making the funding-to-liability ratio even more delusional.

Recent surveys showed that a great number of people do not understand their pensions or how they will generate a retirement income. It is this ignorance that allows Government behave as poorly as it has on pensions. As the election looms it is time to be far more assertive and far more demanding. In that context the Waterford Crystal workers determination not to be cheated and subsequently beggared is inspiring.